New Mexico Cannabis Startup Guide

Note: As of April 2021, New Mexico has legalized cannabis for adult-use (also known as recreational). Click here to read our updated New Mexico cannabis guide.

Starting a cannabis company in New Mexico? We’ve put together a state-specific guide covering everything from available license types to fees, regulations, and what you should include in a New Mexico cannabis business plan. Jump to a section by clicking below, or go straight to our sample cannabis business plan.

New Mexico medical cannabis business startup guide and planning banner

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Cannabis license types
Fees and other barriers to entry
Are cannabis business plans required in New Mexico?
What to include in a business plan
How to research city regulations
Helpful links
Get expert help

Overview of legal cannabis in New Mexico

Since SB 523 passed in 2007, New Mexico adults can possess up to 8 ounces of cannabis every 90 days if they have a written recommendation from a doctor. They can also grow marijuana at home. More than 53,000 patients have registered for medical marijuana use in the state. Businesses can grow and sell recreational marijuana and products, as long as concentrates have 70% THC or less. Medical marijuana dispensary sales in New Mexico could be as high as $120 million this year.

Cannabis business license types

New Mexico issues licenses for three broad categories of cannabis businesses: producers/dispensaries, manufacturers, and testing labs. All must be nonprofit organizations.

Producer/dispensary: In New Mexico, producers/dispensaries grow cannabis and sell it to patients at a retail storefront. Typically, dispensaries must follow strict state-mandated protocols for product tracking, security, record-keeping, and hiring. (Each state’s rules are different.) Producers can grow up to 450 marijuana plants.

Manufacturer: Cannabis manufacturers produce items like edibles, capsules, and oils. Manufacturers wholesale their products to dispensaries.

Testing lab: Consumers and regulators alike demand consistency and quality control in cannabis products, which creates demand for marijuana testing labs. In New Mexico, marijuana testing labs analyze products for microbiological contaminants, mycotoxins, solvent residue, THC, and CBD.

Ancillary business: If you don’t want to grow or sell cannabis in New Mexico, there are plenty of other ways to be part of the booming cannabis industry. You can create a marijuana app, payment processing service, advertising agency, consulting firm, pest management product, accounting firm, automated plant watering system, security service, packaging labeling service, or legal firm--and that’s just the tip of the iceberg!

New Mexico medical and recreational marijuana business plan facts callout.

Fees and other barriers to entry

Local governments may forbid cannabis companies or certain locations, so check city and county regulations.

Application fees: Applying for a cannabis business license in New Mexico costs $10,000 for a producer/dispensary, $1,000 for a manufacturer, and $2,200 for a testing lab.

License fees: It’s $30,000 for a producer/dispensary license in New Mexico if you’re growing 150 plants or fewer. For each 50 plants, it’s an additional $10,000 (e.g., $40,000 if you’re growing 151-200 plants).

Background check: You have to consent to a criminal history background check annually to get (and renew) a cannabis business license in New Mexico.

Do you need a cannabis business plan in New Mexico?

Yes, New Mexico requires anyone applying for a producer license to submit “a business plan showing how the private entity intends to fund its operations and become a successful producer, including information concerning personnel, horticulture, technology, and funding sources.” Plus, creating a business plan will make your life easier--your application already has to include your sales and distribution plan, qualifications, production plan, board member expertise, and security plan, some of which naturally overlap with a business plan. And if you plan on raising funding from investors, you definitely need a business plan.

What to include in your business plan

Here’s what an New Mexico marijuana business plan should include:
  • Product/service description: Will you run a producer/dispensary, testing lab, cannabis consulting firm, product manufacturer, or something else? What’s unique about your business? Be as specific as you can. If you’ll open a marijuana dispensary, which strains of flower and/or manufactured products will you sell?

  • Market research: If you’re opening a dispensary, how many people live within five miles? If you’ll wholesale manufactured products, how many dispensaries will you sell to? If you’re creating an app, who will be the user base, and why would they use your app instead of someone else’s? Use concrete numbers verified by a third party whenever possible (instead of estimates).

  • Competitors: Who will you compete with, both directly and indirectly? What do they do well and poorly? What is their online reputation? How will you differentiate your company?

  • Management team: Summarize your qualifications and those of others on your management team. If not included elsewhere in your application, you have to provide the qualifications of your board of directors, including a doctor and nurse.

  • Financials: This part can be tricky. You need a five-year financial forecast, including projected annual revenue, operating expenses, costs, and net profit. Each year’s projected revenue should include not only revenue but also your margin and direct costs. You can forecast revenue by estimating how much product you think you’ll sell (based on market potential), your retail price, your production cost, and how much you’ll spend on payroll, rent, and other expenses. Your cash flow statement will show that you’ll have enough cash to stay operational. You might want to include a sensitivity analysis (best- and worst-case scenarios), which shows 15% higher and 15% lower revenue than your initial forecast. For marijuana cultivators, it’s important to do a sensitivity analysis based on future potentialities of the wholesale price per pound. You can also include a break-even analysis, showing which month you will be profitable.

  • New Mexico-specific requirements: If not included elsewhere in your application, you should include details in your business plan about your security policy, packaging, and anything else required by the state.

  • Investor proposal: If you are presenting your plan to investors, how are you valuing the shares? Consult with your attorney to make sure you are within state and federal compliance. Sometimes, you’ll need your attorney to draw up an offering memorandum, often called a private placement memorandum (PPM). A PPM informs potential investors on the details of the investment vehicle (your company) and potential risks associated with the investment.
How to research city regulations

Google your city or municipality name and “cannabis regulations” or “marijuana laws” (here’s some info about Albuquerque). If your city or municipality’s website doesn’t have information about cannabis, check recent local news coverage or contact your city clerk, city manager, or town hall.

Helpful Links
Get expert help

Confused or overwhelmed yet? That’s normal. With such a highly regulated industry, and one with different rules in every state, starting a cannabis company can be very complex. Get help with your cannabis business plan from Masterplans, the industry leaders. We’ve worked with hundreds of cannabis entrepreneurs like yourself to create investor-ready documents and presentations so you can not only meet regulations but get the funding you need. Click below for your free, confidential consultation:
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